Tagged: Loan Modification

How to Get Approved for a Mortgage Modification Successfully

If the economy has left you unable to easily afford your mortgage you may be considering a mortgage modification in order to make the payments easier for you to make a month but figuring out how to successfully modify your mortgage is the key to the entire effort of trying to modify your mortgage. There have been many that have attempted to have their mortgage modified but have been rejected for a mortgage modification.

According to statistics the success rate for letting a law firm handle mortgage modifications is high when compared with the success rate of doing a loan modification on your own but there are some things that you can do if you are deciding to attempt a mortgage modification on your own.

  • Communicate – When attempting to modify your mortgage you will more than likely spend a good deal of time on the phone with bank representatives.  It is important to keep in mind that some of the time that you spend on the phone will be productive and some of the time won’t.  When speaking with representative it is important to get the name and ID number of the person you are speaking to and also to take notes of what you told them and what they said.
  • Do Your Math – Before attempting to start the process of a mortgage modification you will want to do some calculations to make sure you will be considered a candidate for a loan modification.  The general rule of thumb is that your monthly mortgage payment should be below 31% of your monthly income.  If your mortgage is already under 31% of your monthly income you will more than likely be denied a mortgage modification.
  • Explain Your Situation – When you apply for a mortgage modification you are usually required to write a hardship letter but sometimes instead of giving you the opportunity to explain your situation in a hardship letter the bank just asks you to check off a generalized situation in a box on a form.  It is a good idea regardless of if you are asked for a hardship letter or not to write one and give it to the bank. In your hardship letter you should explain your situation as to why you feel you are unable to afford your mortgage at its current amount and how you intend to make the monthly mortgage payments once your payments are lowered.
  • Try Again – If you have been denied a mortgage modification previously it does not hurt to try again especially if your financial situation has changed since the last time you applied for a mortgage modification or if you applied for the modification over a year or so ago. You may be suprised to find out that they may approve you this time around.
  • If You Need Help – Ask – Asking for help can make a huge difference in the outcome of your mortgage modification approval.  Hiring a real estate lawyer to handle your mortgage modification sometimes gets a higher success rate because a lawyer will be able to sit down with you and let you know what you should expect and if a mortgage modification is something that you will or will not be appoved for based on your specific situation.  A law firm handling mortgage modifications will spend the time on the phone with the bank for you saving you hours upon hours of time on the phone with the bank and as mentioned earlier mortgage modification lawyers often have a higher success rate in mortgage modifications than a home owner would because they are experienced in this field and know the in’s and out’s of the mortgage modification process.

If you would like to speak with a mortgage modification lawyer in Staten Island, New York call 718-979-4300 or email us though our contact form.

Staten Island Home Sales: What to Do if Your Home Is Worth Less Than the Mortgage

Many people who purchased a home prior to the economic downturn may be in a situation currently where their home is now worth less than the mortgage is on it.  When a mortgage is higher than what a home is worth it is called negative equity.  Currently a lot of homes appraise for much less than what their homes used to be worth because of the recession leaving many people with mortgages that are higher than what their home is worth.

Negative equity can affect people in many different ways.  Some people may find themselves able to still pay their mortgage and may not be affected by the negative equity situation and may eventually be able to recover from the negative equity in the long run if the worth of their home goes up. Other people may find themselves unable to pay for their mortgage anymore and may want to either try to make their monthly mortgage payments more affordable or may want to sell their home so that they do not need to make such expensive mortgage payments anymore.

When a homeowner is left with a negative equity home loan and they are unable to pay their monthly mortgage payments there may seem like there is no way out and no options to recover from the damage that has been done.  They may also feel like there is no way around this problem and may seem like you are on the bottom of a huge mountain looking up at nothing but an impossible situation.  Luckily there are options for you if you are one of these homeowners.

If you cant afford to live in your home anymore you have a couple of options that you can consider before ending up in foreclosure:

  • Loan Modification – A loan modification is when the bank agrees to modify the terms of the loan outside of the original terms of the contract.  In this option you will remain living in your home but will just have the terms of the mortgage changed to help reduce your monthly payments.
  • Short Sale – A short sale is when the bank agrees to take a lower amount for the sale of your house than what the loan has left on it.  For example if you have a mortgage with $245,000 left but you can only sell your house for $220,000 the bank will decide if the amount is acceptable if so they will release you of your lien once the sale takes place.  The bank will be loosing $25,000 but they will still be making more off of the house than if the house went into foreclosure. This process starts off similar to a regular home sale where the homeowner puts the house up for sale and finds a buyer. Once a buyer is found and a contract of sale is signed certain paperwork has to be submitted to your bank so the bank can decide if the offer for the house is acceptable to them.  If so the short sale process will continue and the house will be sold at closing.

These two choices are the best way route to go if you are unable to make your montly payments anymore and have a negative equity home loan.

For more information on loan modifications or short sales in Staten Island or Brooklyn, New York or New Jersey call 718.979.4300 or 800.976.4904 to speak with a Staten Island real estate lawyer.